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Tuesday, April 7, 2015

Water and Wisdom

It all started when Cousin Vinnie sent out a post entitled "What is Scarce is Wisdom, not Water" by a conservative author dealing with California Governor Brown's action calling for a 25% reduction of water usage to adapt to the Great Drought. 

The author is saying that water, a commodity like everything else, should be privatized and should be bought and sold on the open market. But as long as prices are kept artificially low by government action, there is no incentive to move water where demand is high and supply is low. If prices for water (like air, land, sun, DNA, human organs, and humans themselves) are allowed to rise, the profit motive will spur innovation to secure and sell these things to consumers and create competition in which rivals will fight to provide the best service and products at the lowest prices. It is the market that will conserve these commodities and distribute them (fairly?) through efficient pricing. For instance, letting market forces rule would have farmers who own water rights now sell water and make more profit than they would by selling crops.

This led me into a wonderful dialogue with a good person (whom I will call Adam) that I think helps clarify the point I am trying to make in my "out of the box" thinking on thinking. At least for my primary intended reader--myself. 

Adam: The point that the author is making is that govt control maintains water at an artificially low price. Although privatization is a dirty word to Progressives, it simply means free market: when the price rises market forces kick in to take advantage and stabilizes the market by providing solutions and innovations. No government solutions which are generally hidebound and and politically motivated, are as efficient as the laws of supply and demand.


Adam, look at your language. "When price rises market forces kick in to take advantage and stabilizes the market etc."  This is the language of religious faith. Your mythology is not mine. But let it go at that. I'm not saying you are wrong, I'm just saying this is a very different paradigm. Water is is not a commodity in my mythology. It is not owned by capitalists and should not be subject to market forces. 

I am not a socialist nor a capitalist; and I really would like to see a truly free market though I think that one does not, and maybe cannot, exist. It is controlled by those who have the most power. However I think we are caught in old concepts based on an old (19th c) mythology in which we make all God's gifts commodities for those who get control of them first.


I do look at the end result. Cutting water supplies has economic effects. No matter how we wish it, supply and demand rules persist. I'm reminded of the parable of the servants: the ones  who ventured gained; the one who cowered lost.


Yes, they do if that’s the way we want to make our world. You make it a law of God. I make it a social construction.


No, Rollie, there is no, and has never been any government entity that could control market forces effectively. These forces aren't ordained by God but are the result billions of individual decisions by millions of people, both vendors and consumers that guide the market. They have a life of their own and government's paltry efforts to control them are quite often thwarted by those millions. The basic law of human nature is that individuals tend to make decisions based on what they perceive to be in their best interests. Granted that the decisions they make may not actually be in their best interests but, nonetheless, these decisions make part of the market force. 

A case in point is the water problem in CA. Probably the best solution is atomic powered desalinization plants but, see foregoing paragraph, the left coast will pass on that option.


Just one last response. I promise. (Afternote: it turns out that I lied!)

What you say is a belief. And I respect that belief as I do all religious dogmas. It is a belief in step with a 19th century utilitarian philosophy based on a 19th century doctrine of human nature with supernatural “market forces,” “invisible hands,” “monetization,” “surplus values” and more. It is not my belief or doctrine; but I respect it while at the same time I advocate for the separation of church and state. Religious doctrines may influence politics. I acknowledge that my beliefs (Catholic Social Teaching) certainly influence my politics; but at the same time I recognize that all doctrines need to be revisited, criticized, and revised to better fit the changes in human nature, culture, politics, and economy.

I think along with Peter Diamandis (AbundanceBold) and Jeremy Rifkin (Zero Marginal Cost Society) that with the Internet of Things we are on the verge of a whole new zero-margin economy (and thinking) that transcends the old timers view that pits free market against government (something BTW that Adam Smith did not do except for his condemnation of mercantilism) and capitalism against socialism. The old doctrine would have capital signify ownership first of land then of machines and labor measured in money while leaving out all the other capitals which are important to humanity. Moreover it identified public with government which the financial wealthiest vied to control over the working poor. That is a passé way of thinking the above authors and other new economists say; and I agree. A whole new paradigm is emerging; and both the so-called laissez-faire conservatives and the so-called government control liberals are caught in an argument that 

belongs to the Industrial Revolution of the 19th and 20th centuries, but not the new industrial revolution we are now experiencing. Both of the American political parties are caught in these old habits of thought.

Thankfully, many businesses and corporations, 
and certain government officials, are recognizing that they might play an important role in the new economy (sometimes called “new capitalism,” “social capitalism,” or “collaborative commons”); and they need to if they are to survive. Neither private nor government control of resources and the means of production is the answer in this new economy in which we seek access to products, but not necessarily ownership of them. 

So what is the answer? I sure don’t pretend to know. I am just delighted to see so many in the millennial generation experimenting with new ways to think about business, human worth, economics and politics "as if people mattered." 

Yes, what is scarce is wisdom, not water. 


I'm not sure why religion has become a part of this conversation on economic theory. Obviously we view the world through two different prisms and the twain shall never meet.


Exactly. That is what I am saying. You have your values, faith, and doctrines which are not mine.


I admire your persistence, but you are still talking religion and I am talking Economics and Psychology. We are not discussing the same subjects, no matter what our religious bents.


No, you miss the point. I’m saying your economics, like most, is a mythology.


Do you mean Obamanomics for example? I follow current economic theory, but you are the first to suggest that conclusions with which you disagree are based in religion. Economics is more an art than a science because of the billions of elements that are involved and is thus subject to rational 
interpretation, not religious fervor.


Yes, including obamanomics and reaganomics. I am just saying all economics (just as Weber taught about capitalism) has a cultural component with unproven assumptions and undefined terms like any formal system (see Gödel’s proof on mathematics). Not all religion is fervorous, but all includes an imaginative narrative for understanding the universe, a paradigm through which even the hardest of sciences depend (see Thomas Kuhn’s great work on the scientific revolution). Einstein himself said that imagination was the chief component of science. I’m not judging the mythology (assumptions, values, symbols, and imaginative framework) which is grounding your economics and giving meaning to its terms. 

In sum:

My vocation (which I attribute to Socrates and a few other great teachers) is simply to know that I do not know (i.e. wisdom). That means recognizing that these imaginative frameworks, symbols, images may be useful, but are not absolute and not forever. They need to be continually critiqued and transcended. When you absolutize your doctrines, your concepts, and your models, then you leave the realm of rational interpretation and move to religious fervor. All I am asking you to do is to recognize that a lot of your language (e.g. “market forces,” “supply-demand,” invisible hand”) are metaphors that might or might not work in certain limited times and places—just as I suppose as “spirits,” “angels,” “gods,” “revelations” “ether,” “humors,” "bad vibes,” etc, worked in others. Let's just keep open that with other values and perspectives, there may be other ways of doing economics. 


Are you sure that you're not a defrocked Jesuit, or perhaps a Nihilist? Your analysis would not allow of any proof of anything. Both social scientists and physical scientists have working hypotheses, some of which seem to work under certain circumstances, but fail under others. Even Einstein's Theory of relativity has its doubters.

Reagonomics may have had flaws, but compared to Obamanomics (which was a pale reminder of Roosevelt's New Deal), it was a jewel of great price. Keeping an open mind may be great or it just may be an excuse for failure to commit.

So here I stopped to leave the last word to Adam. He begins to move from argument to characterization--i.e. name-calling. And I am reasonably sure that I am not a defrocked Jesuit (whatever that is) or a Nihilist because I accept my contingency and transiency. And I do agree (and thought that is what I was saying about his laissez-faire economics) that scientists use hypotheses which work under certain circumstances and fail under others. And that all proofs (even the theory of relativity) should be critiqued--usually by incorporation into a broader theory as Einstein did with Newtonian physics. As I noted much earlier in these reflections, Descartes' fault was not to doubt everything but to achieve absolute certainty.

I continually denied that I was saying his analysis was bad. I just think it is not in tune with changing circumstances and is quite paradigm-limited.

I like his statement "keeping an open mind may be great or it just may be an excuse for a failure to commit."  But my commitment is to keep an open mind--that is my path to Infinity, Universality, and Integrity. 

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